KUALA LUMPUR, March 24 - Malaysia plans to ramp up its second home programme to derive more economic spin-offs, noticeably in the area of investments and real estate, where nearly RM5 billion of the latter were sold to foreign applicants over the past five years.

Since 2004, Malaysia My Second Home or MM2H participants have acquired 510 residential units worth some RM4.72 billion, and 1,452 locally assembled vehicles, Tourism Minister Azalina Othman Said said yesterday at an event to re-brand the programme.

Kuala Lumpur believes the programme momentum is picking up and appears to have decided the long-stay initiative should not be confined to its 'tourism value', but should now be better leveraged for the economic benefits.

As such, its re-branding of the MM2H includes positioning it 'as an economic and investment generating initiative to attract high net-worth individuals to set up businesses or joint-ventures with local entrepreneurs'.

Participants can now 'invest actively in Malaysia' and those above 50 years old can work in critical sectors of the economy where locals lack the expertise or experience - subject to the approval of an expatriate committee.

The areas were left unspecified.

Other 'key improvements' include giving foreign spouses married to Malaysian citizens the option of staying in the country under the programme.

Approved participants get a 10-year social visit pass.

Malaysia appears to be making it easier for skilled and wealthy foreign nationals to obtain permanent residency because of the economic slump and competition from other markets.

The government anticipates foreign direct investments could plunge by half this year and its property sector, like most, has weakened as investors cash out or wait on the sidelines for the recovery.

Unlike more vibrant markets in the region, Kuala Lumpur also lacks a big pool of expatriates to occupy the many apartments coming up in the city.

To address some of these issues and accelerate the change to a knowledge economy, the government recently announced it would offer permanent resident status to high net-worth individuals that bring more than US$2 million (RM7.2 million) into the country for investments or savings.

The same consideration would be made for 'highly skilled foreign professionals'.

The financial requirements for MM2H applicants are lower. Those below 50-years old are required to show proof of liquid assets worth at least RM500,000, while those older than 50 must have a minimum RM350,000.

In the main, the MM2H has attracted retirees, many drawn by the lower cost of living, food and English-speaking population.

Given the growing retiree population in Japan, Korea, Taiwan, US, Europe and China, Ms Azalina said the programme would be intensified in some of these source countries.

A total of 12,566 foreign applicants have been approved as at the end of last year. China topped the list with 2,231 participants. Bangladesh was second, followed by the UK, Japan and Singapore (710 applicants). - Business Times Singapore